China Investor Said in Talks for Stake in NYC GM Building

The General Motors building stands in New York. Photographer: Andrew Harrer/Bloomberg

March 8 (Bloomberg) -- A Chinese investor is in talks to
buy a 40 percent stake in Manhattan’s General Motors Building, a
50-story tower near the southeast corner of Central Park.

The prospective buyer is the family of Zhang Xin, chief
executive officer of office landlord Soho China Ltd., according
to a person with knowledge of the negotiations who asked not to
be named because the talks are private.

The sellers are a Goldman Sachs Group Inc. fund that
invests on behalf of the sovereign wealth funds of Kuwait and
Qatar, and Meraas Capital LLC, a Dubai-based private-equity
firm, the person said. If completed, the deal would value the
tower at about $3.4 billion, according to the Wall Street
Journal, which reported the talks earlier today.

Boston Properties Inc., the biggest U.S. office real estate
investment trust, owns the other 60 percent of the tower. The
Boston-based company led the investment group that paid $2.8
billion for the property in 2008, according to data from
research firm Real Capital Analytics Inc.

“If we have the opportunity to work with a new partner,
we’re happy to do that,” Boston Properties President Douglas
Linde said Jan. 30 on the REIT’s earnings conference call. He
said the company was content with its stake.

“We, as a 60 percent owner and with significant
opportunities on the control side, feel really good about how we
can operate the buildings and what we can do with regards to
repositioning and re-tenanting and putting capital into the
buildings,” Linde said.

Michael DuVally, a Goldman Sachs spokesman, declined to
comment on the talks. E-mails to Zhang and Meraas sent outside
of regular business hours weren’t immediately returned.

The marble-faced tower, on Fifth Avenue at 59th Street, is
across from the Plaza Hotel. The Boston Properties-led group
bought the building from New York developer Harry Macklowe, who
won a bid for it in 2003. He was forced to sell it five years
later to help pay $7 billion in debt he had defaulted on after
borrowing to purchase seven other Manhattan skyscrapers.